e-Conveyancing represents an exciting frontier for the entire property industry, presenting new opportunities and the potential for innovative work practices. At the same time, e-Conveyancing raises questions about how the traditional understanding of a vendor and a purchaser’s obligations will evolve, in order to adapt to a digital settlement process. Being ready, willing and able to settle In a recent paper, ‘To tender or not to tender: When is a party ready, willing and able for electronic settlement’ (2016) 25 Australian Property Law Journal 22, Sharon Christensen and W D Duncan consider how the traditional understanding of being ready, willing and able to settle applies to an electronic settlement. It is generally accepted that the seller’s obligation to deliver the certificate of title and transfer documents and the buyer’s obligation to pay the balance purchase monies are dependent and concurrent, subject to the terms in the contract of sale (Foran v Wight). An innocent party is not entitled to terminate the contract due to the other party’s failure to perform unless the innocent party is ready and willing to perform. However, if the other party intimates before the time scheduled for settlement that performance will be futile, the innocent party is not required to tender performance (Peter Turnbull Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd). In examining the electronic settlement terms in NSW and QLD, Christensen and Duncan note that there are three key differences between an electronic settlement and a paper settlement: There is no overt physical act of tender that a party can refer to as being ready, willing and able; The ability of the seller to deliver a transfer capable of registration requires both parties to provide information into a Workspace and to digitally sign the transfer; and Settlement depends on all computer systems within PEXA, the Land Registry, RBA and the duty authorities as being operative on the settlement date. Failure of the buyer’s solicitor to sign the electronic transfer Failure by a party to digitally sign a transfer of land may be an intimation that tender by the other party is excused. On another analysis, the other party could be taken to be ready, willing & able, given they have performed all of their obligations, except for those obligations prevented by the actions or omissions of the first party. Where it is unclear whether settlement will proceed electronically If it is unclear whether settlement will proceed electronically (for example, it is unclear whether your client’s financial institution is willing to settle electronically), a practitioner is not absolved from its obligation to settle. Accordingly, practitioners will need to consider whether they need to prepare to settle in paper. Changing the settlement date in PEXA Where a participant in a Workspace proposes to change the settlement date, this is likely to constitute a request for an extension of the settlement date. Accordingly, penalties may apply under the contract. Note that although the lefthand navigation bar will reflect the last proposed settlement date and time, the status of the settlement date and time will show as “pending” until all parties have accepted this date and time in the system. Practitioners will need to consider how they should accept a proposed changed settlement without waiving their right to seek penalties under the contract (practitioners could consider using the Conversation tool in PEXA). Note that the Transfer Guidelines provide for when the date and time should be accepted. Where the guidelines require steps to be taken within a particular timeframe before settlement, this would be before the accepted date, or where the date is pending, the last proposed date for settlement. Contractual obligations will continue to apply unless waived or excused by the other party.
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Hi Jeannette @JErnst,
Ideally, verification of identity would be undertaken at the same time as the Client Authorisation is signed. However, if this is not possible, you would need to undertake reasonable steps to ensure the Client Authorisation was signed by your client or their agent. Please see ARNECC Guidance Note #1 here for further information.
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Thanks for your question.
When a signer authorises a source financial line item, a Trust Account Authorisation Record is created. You will have the ability to access the Trust Account Authorisation before and after settlement as documentary evidence of the transaction performed for the relevant trust account source line item. This document records approval provided by the signer(s) for the debit of the amount of funds specified in the source line item from your trust account into your financial institution's nominated internal account for the purposes of the property transaction.
PEXA also allows Subscribers to access a Settlement Completion Record which records all source and destination line items for the transaction. The combination of your client file and instructions, the Trust Account Authorisation Record (where applicable) and the Settlement Completion Record are all components of record keeping for a PEXA transaction.
PEXA has consulted with trust account regulators in all active jurisdictions and has provided information about PEXA financial settlements and the records produced by PEXA. Each regulator has reviewed the records produced by PEXA in the context of the applicable trust account obligations in their jurisdiction.
I trust that answers your query. If you need anything further please let me know.
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